The voice of the cooperative and condominium community.
When residents opposed a Business Improvement District proposed for the Upper East Side, the AOA helped to organize the community and represent its concerns to the press and government through a well-organized campaign "Say No to Residential BIDS!," explained Ken Abelson, AOA's newly-elected president. On a more proactive basis, the AOA is currently exploring the development of improved security services that could be offered to its member buildings as well as a cadre of other services, including a special program for the elderly, he added.
Today more than 100,000 New York City residents in over 200 apartment buildings belong to the AOA, as well as representatives of the city's largest residential property management firms. Originally founded in 1928 as the Tenant Owners Apartment Association, the group seeks fairer tax treatment for the cooperative and condominium community at City Hall, in Albany, and in Washington D.C.
In 1928, the AOA championed passage of Internal Revenue Code Section 216, which allows shareholders to deduct their proportionate share of real estate taxes and interest incurred by their cooperative housing corporations. In 1951, the AOA secured favorable capital gains treatment on the sale of shares in a cooperative housing corporation. The AOA is presently monitoring court cases involving Internal Revenue Code Section 277, which deals with federal income taxes on commercial income. At this time, New York state seeks audit adjustments of corporate income by applying Section 277 to the income of cooperative housing corporations.
The AOA has taken a leadership role in educating New York City legislators about the inequitable taxes that apartment owners must pay in comparison with single family home owners. Cooperative shareholders and condominium owners, classified as Class 2 property holders, have experienced a dramatic escalation in their property taxes, while single family home owners, classified as Class 1 property owners, are shielded from any sizeable rate increase. As AOA board member and its counsel Frank Karelsen noted, "Owners of co-ops and condos are homeowners in their own right and should therefore be assessed at the Class 1 rate."
Under current law, the property taxes of a single home owner can be increased 2.65 percent, while those of an apartment owner can be increased 4.82 percent. The New York City Council Finance Committee has proposed a 0.45 percent increase for Class 1 property owners and a 2.58 percent increase for Class 2 property owners - more than five times the Class 1 increase. The AOA supports a the Equal Impact Property Tax plan, which will be re-introduced in 1996 by New York City Councilmembers Andrew Eristoff and Charles Millard. This plan calls for a 1.8 percent increase on both Class 1 and 2 property owners.
With respect to the establishment of an Upper East Side Security/business district, commonly referred to as a "residential BID," proposed by developer Howard P. Milstein, the AOA formed a steering committee and campaigned against the move. "Say NO to Residential BIDs" was composed of community residents, cooperative and condominium board members, and neighborhood and civic associations. The proposed Special Security District would have required an estimated annual budget o f at least $20 million dollars to provide security, sanitation, homeless outreach and park enhancement, according to AOA. All residential properties from 59th Street to 96th Street between Fifth Avenue and the East River would have had a mandatory supplemental tax imposed to cover the costs of the SSD.
The AOA instead proposed supporting and expanding community safety programs already operating on the Upper East Side, such as Block Watcher, Interwatch, Safe Haven, and Safety Net. Organization members pointed out that Upper East Side residents already pay $664.7 million dollars annually in real estate taxes for services the SSD would have duplicated. Community objections eventually defeated the establishment of the SSD.
Other AOA concerns involve cooperative and condominium compliance with city asbestos and fire safety codes, as well as with pertinent Americans With Disabilities Act provisions. The organization is also opposing legislation which might impinge upon the rights of cooperative boards to approve apartment transfers. The AOA's Annual Legislative Breakfasts that present members with an excellent opportunity to communicate their concerns to their representatives on the New York City Council.
Vigorously fighting for tax relief continues to be the primary focus of the Apartment Owners Association's agenda. The organization also vigilantly monitors community issues affecting the quality of life of cooperative and condominium dwellers.
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|Title Annotation:||Profile of the Week: Apartment Owners Association|
|Publication:||Real Estate Weekly|
|Date:||Dec 13, 1995|
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